“Paying workers more than the going market rate for their skill level can bring a lot of benefits to your company,” McArdle writes. “You get lower turnover and, arguably, better on-the-job performance.”

The low turnover stems from happier workers, more high-quality applicants to choose from, and workers’ fear that they can’t make the same money anywhere else.

If everyone in the industry raised wages, Costco’s quality of customer service would probably decline. And it’s unlikely that Wal-Mart’s would improve.

“If all the employers of minimum-wage labour followed Costco’s lead and paid higher wages and benefits, Costco would be less profitable, because the quality of its labour force would revert to the mean,” she writes.

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